US claims stolen Chinese money washed in Van RE.

Anyone who’s read this site for a while has probably noticed a couple of things:

1. A number of regular reader and commenters here blame wealthy Chinese ‘investor immigrants’ for the high cost of real estate in Vancouver.

2. The administration of this site disagrees and thinks that over-stretched house-horny locals and government insured lending on real estate are primarily to blame for high prices.

Yet we must admit this story has us thinking perhaps the truth is a blend of those two viewpoints:

U.S. alleges Metro Vancouver homes were part of scheme to launder money embezzled in China

Authorities allege that in the summer of 2011, shortly after they qualified for U.S. green cards, Qiao and Zhao began surreptitiously using accomplices to transfer millions of dollars into bank accounts in Wenzhou city, Hong Kong and Canada. At least two Canadian banks were used, HSBC Canada and the Royal Bank of Canada.

Zhao recently put the White Rock property up for sale for $689,000. Paulo Leung, a real estate agent with Regent Park Realty, said he had also sold the property to her in 2012 as an investment. He declined to say more. Both properties are being managed by Vancouver-based Chartell Properties. A receptionist there said they knew Zhao.

A search of property and title records conducted by The Vancouver Sun show that Zhao’s numbered company bought the properties outright. However, a few months later, it took out mortgages on both, totalling $1.1 million, that represented almost their entire market value. According to the U.S. indictment, a few weeks later Zhao and Qiao took money from their Canadian RBC account to pay for a Bellevue home.

Officials for the RCMP and Citizenship and Immigration Canada said they did not know if their departments assisted U.S. and Chinese investigators, and could not comment if they did.

Read the full article over in the Vancouver Sun.

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ostritch
Member
ostritch
Interesting that this article is what did it for you. Oh well. Everyone has their own moment on the road to Damascus. As one of the longest-standing HAM believers, I don’t deny the role of the credit in the bubble (or whatever it’s supposed to be called when it has been inflated by dirty money as well as credit). Definitely Mr. & Mrs. Spring Panic pony up some serious dough every year–from the banks and from mom and dad. They are in serious debt. By the sounds of this snippet, that HAM-a-hole sounds like he’s in a panic to move money around the planet. Anywhere but his home country, apparently. How sad is that from a patriotic POV and a humanitarian one. I guess it’s a true bubble in the sense that we won’t know when the tide will go… Read more »
Oracle
Guest
Oracle

Admin:

Let me tell you this now. Not trying to pump up anything. Lots of money has started to come to Canada from India now. Gov doesn’t care.

Again, down vote if you like but I’m telling you the truth.

Oracle
Guest
Oracle

The corrupt Mp’s only need to do one thing.

Allow info sharing between CRA and CMHC and Immigration Canada. But nope, guess who is in on the scam?

Conservatives in bed with the NDP? Yup. CSEC digs and you will find..

“Forefathers” built this country. RCMP, CSEC, CSIS: Take it back!

flaneur
Guest
flaneur
Top DHS official accused of meddling with immigration The Washington Times – Tuesday, March 24, 2015 “A top Obama administration official caved to political pressure to approve immigration applications from well-connected wealthy foreigners, ignoring warnings from career officers who said the investor visas should be denied, an inspector general concluded in a report Tuesday.” (others jump in in his defense) “Instead, Mr. Johnson blamed the EB-5 investor program itself for the problems. The program is designed to attract wealthy foreigners who promise to invest money in the U.S. Investors must make capital investments of at least $500,000 and must prove their money will create or sustain at least 10 jobs. That means USCIS officers have to evaluate complex business transactions to make judgments. The program has grown under Mr. Obama, with initial applications rising from about 1,000 petitions a year… Read more »
Bo Xilai
Member
Bo Xilai

In 2012, the UK government introduced a new tax on Company-owned Residential Real Estate.

http://www.mww-llp.com/new-tax-on-company-owned-residential-property

I definitely think the BC government should introduce something similar here to allow municipalities to charge differential amounts.

Many wealthy individuals set up corporations to own their property to get tax breaks and to avoid Land Transfer Taxes when selling or transferring property.

Metro Vancouver is screaming for more tax revenue for things like Translink expansion. I tell them to stuff their 0.5% and start going after foreign-controlled corporations and their wealthy owners.

southseacompany
Member
southseacompany
“Amid fierce mortgage battle, some banks shifting focus from rates to features”, Globe & Mail http://www.theglobeandmail.com/report-on-business/economy/housing/rbc-bank-of-nova-scotia-shift-focus-from-mortgage-rates-to-features/article23678824/ “The race to offer the country’s lowest mortgage rate has some lenders looking beyond the numbers.” “With the critical spring housing market in full swing, Bank of Montreal, Toronto-Dominion Bank and Canadian Imperial Bank of Commerce are all offering rate specials that are among the lowest ever advertised. Others, however, are looking to turn the message away from rates.” “Royal Bank of Canada, the country’s largest mortgage lender, is launching a campaign this week that promises employee pricing on all of its mortgage products.” “At 2.69 per cent, RBC’s current employee rate for a five-year fixed mortgage would make it the lowest among the rates advertised by any major bank.” “Rather than advertise a rate special, Bank of Nova Scotia is launching its spring… Read more »
southseacompany
Member
southseacompany

“Bank of Canada chief Stephen Poloz warns oil shock’s effect on economy will be ‘atrocious’”, Financial Post

http://business.financialpost.com/2015/03/30/bank-of-canadas-stephen-poloz-warns-oils-effect-on-economy-will-be-atrocious/

“The head of the Bank of Canada said a slump in oil prices is having an “atrocious” effect on the Canadian economy but a cheaper currency and incipient U.S. revival should help exports drive a recovery, the Financial Times reported on Monday.”

“Governor Stephen Poloz said in an interview with the newspaper that the central bank still had many options to help the economy if needed. These included pledges to keep interest rates low for a prolonged period of time — a practice known as “forward guidance” — as well as asset purchases.”

southseacompany
Member
southseacompany

“Executives increasingly gloomy about oil shock’s impact on economy”, Globe & Mail

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/canadian-executives-pessimistic-about-oil-shocks-impact-on-economy/article23679103/

“Canadian executives are increasingly gloomy about the prospects for Canada’s economy, and are fearful that the recent drop in oil prices will stunt the country’s growth in the coming year.”

Loon
Guest
Loon

Re: topic, 1 HAM v 2 Locals,

It’s not so cut and dry, it’s both.

HAM comfortably pay more for a small percentage of Van RE, increasing the overall avg.

The locals selling feel they can get more so ask for more, and the locals buying are put in the uncomfortable position of paying more.

Who is really to blame? In order:

1.Local gov for not restricting foreign ownership, they set an unlevel playing field from the start.
2. Federal gov and banks for allowing locals to ‘afford’ real estate.
3. Locals for actually paying these prices
4. Corrupt money (foreign or local) for increasing the average.

southseacompany
Member
southseacompany

“Is Poloz’s fight to keep prices up risking a bigger problem?”, Financial Post

http://business.financialpost.com/2015/03/30/is-polozs-fight-to-keep-prices-up-risking-a-bigger-problem/

“Our central bank is working hard to keep inflation expectations steady, but easy money is also helping to feed asset prices. If periods of high borrowing (household debt in Canada now exceeds GDP) are correlated with risk of a collapse in asset prices (the average price of a detached home in Toronto recently passed $1 million), and if that may be more damaging to the economy than CPI deflation – well, it seems fair to ask whether we are fighting the right bogeyman.”

vangrl
Member
vangrl

#10

duh..

Burnaby Bear
Guest
Burnaby Bear

There is no doubt in my mind that HAM exists; what is in doubt is how much HAM is buying Vancouver real estate, and how much of an effect it has on prices. I still feel that largest factor is local buyers, juiced by cheap rates and brainwashed by the price increases over the last 10 years.

The linked story says that the couple embezzled $50 million, and they bought 2 properties worth around $1 million total…their purchases will have zero effect on the prices in Vancouver. If they are typical of HAM than they prove that HAM has no effect on Vancouver prices, not the opposite.

vangrl
Member
vangrl

#12

Did we not have over 30,000 IIP’s and an estimated 20,000 more that were supposed to stay in Quebec but made their way over to Van?

So approx 50,000 immigrants just from the IIP program alone that came to B.C. Does anyone think that any of those people did not buy at least one property here? My guess is that on average they each bought 2 properties. And does anyone believe they aren’t setting up a number of companies that are purchasing properties, with no real data that leads directly back to them?

How can that not have an effect of our housing?

vangrl
Member
vangrl
we’ve had low rates for awhile and it hasn’t seemed to help the economy at all, the only thing effect I’ve seen is Canadians taking on more debt, specifically housing debt. Lowering the rates by 1/4 point is certainly not going to help those that are effected by the oil slump, if they lose their job, which I’m sure many will, saving a 1/4 point on their mortgage, or debt of any kind, is hardly going to make a difference. The more debt Canadians take on, the less they have to spend at local retailers & restaurants & life in general, and I believe we’re seeing the effect, not a day goes by that we don’t hear of some big retailer shutting it’s doors. Our dollar is so low now that most are leery of travelling outside of Canada, so… Read more »
Joe Mainlander
Guest
Joe Mainlander

@#13 – 30k or maybe 50k. The IIP’s been around for 28 years. At most that’s 1,800/yr. That includes family members, so maybe at most 900 families per year. Even if, as you speculate, they bought two homes each, that’s 1,800 sales a year, during a period where Metro Van saw 35,000 to 45,000 per year, so at most maybe around 5% of sales.

The order of magnitude of these numbers needs to be placed in the context of all sales to understand their potential impact.

patriotz
Member

@13: “How can that not have an effect of our housing?”

If the growth in supply keeps up with the growth in demand. And growth in demand from IIP households is a drop in the bucket compared with growth in other home owning households anyway.

Now as I noted they’re not making any more West Side, so certainly you can blame an influx of wealthy households for higher prices at the top.

Son of Ponzi
Guest
Son of Ponzi

#12
you call yourself “Burnaby Bear” but you obviously have never been to MetroTown.

ostritch
Member
ostritch
Oracle, All laws and systems were made for times in the past. It’s no surprise that the government can’t or won’t do anything about it. These are hard-won privacy laws that restrict government from excessive control over our lives. They won’t change easily because the implications are greater than saving Vancouverites from financial risk. If you and I aren’t able to react fast to globalization, imagine how slow the law will be. It’s the same sad thing with wars. Fought using ideas from the past. So on it goes. I see local people (Asian and white; old and young) desperate to try to cling onto their lives here by buying 1/4, 1/25, 1/68 homes they cannot really afford. That’s what a condo or a town home is, isn’t it? One fraction of a piece of land, the price of which… Read more »
Corrupt in Canada
Guest
Corrupt in Canada

“Corrupt in Canada Says:
March 29th, 2015 at 9:38 pm 97

Jimmy started off in the porn business.

Like or Dislike: Thumb up 0 Thumb down 3”

Why was this voted down? Its the truth. Go do your research. Goes to show the group think here.

Corrupt in Canada
Guest
Corrupt in Canada

I posted this before and I will post it again,
“Earlier this month, Chinese prosecutors, acting as part of the anti-corruption crackdown launched by Chinese President Xi Jinping, gave the U.S. State Department a “priority list” of list of 150 people it wanted help in finding and in repatriating monies they allegedly embezzled. It is not known if Qiao and Zhao are on that list, but the Sinograin scandal was a major embarrassment to the Chinese government.”

150 people worldwide, that is less than 1 day of worth of sales, and this is what is driving Vancouver real estate? Please.

People who believe this are as gullible as the people who believe we are running out of land.

RFM
Guest
RFM

Oh Admin, admin, admin……………..

To look at the Vancouver residential real estate market in the last 20 years and not acknowledge the very significant influence of foreign money driving prices upwards is akin to looking at the sun and failing to see the light.

🙂

RFM

Bo Xilai
Member
Bo Xilai

#20, CIC – Those 150 are just the tip of the iceberg…

That’s like saying there can’t be that much crime in the US because The FBI’s Most Wanted List only has 10 Criminals.

http://www.fbi.gov/wanted/topten

Joe Mainlander
Guest
Joe Mainlander

@#21

Are you sure you didn’t mean “looking at The Sun”
Or maybe the even The Province.

Yes, if you look there, you will see ‘the light’ their advertisers want you to see.

vangrl
Member
vangrl

The 50,000 number was between the a range of 5 years. I believe it was 2003-2008

“Canada receives 250,000 immigrants per year, and the investor represents 3 per cent, more or less, of the total portfolio. Is that something that we want to keep or that we want to increase? Once we know that parameter, it will be very easy for the stakeholders to design the program. If we know that we need only 500, then, yes, we can maybe overp”

So approx 7,500 IIP’s came to Canada on average every year, I’d assume most were from China.

So lets say 6000 chinese bought 2 homes a year, that’s 12,000 sales or 30% of sales. Now lets imagine that the majority of those sales were in a few specific higher priced areas…

vangrl
Member
vangrl

“The Program should be not only maintained, but expanded. It is financially profitable from a
management standpoint, and results in the presence in Canada of thousands of affluent
families who significantly contribute to the economy. Moreover, their demographic profile
and the integration of the second generation directly contribute to respond positively to our
future economic and social challenges. Also, because they still represent only 3% of new
immigrants to Canada, their numbers may well be raised substantially;”

boy were they wrong

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